In a market as competitive and dynamic as China, no single strategy will serve as a permanent solution; you must keep your ear to the ground and adjust swiftly.
The points covered in this article are intended for Cross Border e-commerce beauty brands that are entering the China market for the first time or who want to improve their current operations. Let’s get started.
Driving Traffic Costs Time & Money
China is vast, but it is also complex, with e-commerce and social media ecosystems that are vastly different from those in the West. Let alone the purchase patterns and consumer behaviour. It takes 2-3 years for businesses in the cross-border e-commerce market to become profitable. That is a long time for a small brand to invest in a market and not see a return.
Among the 1.4 billion people in China, 894M of them are shopping online. Ecommerce transactions are increasing at a rapid rate and sales are expected to increase by 50% by the year 2025. But, before you are swayed by these figures, be sure you are prepared to invest.
The main reason for the long period is that building your brand and credibility in a market with a lot of very powerful gatekeepers (Tmall/Taobao) is slow and expensive. Social networks in China require you to pay KOLs for improved visibility and an increase in the number of followers. You will also need to incur media spends to boost your reach.
Finding The Right Commercial Partner
When operating in China, most small to medium-sized beauty companies require the assistance of a suitable commercial partner:
a) Trade Partner – This involves the least amount of commitment and gives your brand the maximum control. However, it is a commercial arrangement that does not necessarily leave the operator with enough leeway or motivation to maximise your business’s potential.
b) Distributor — a traditional distributor that signs you up for a three-year exclusive arrangement has advantages such as stock risk and committed volumes, but you lose a lot of control over your brand in China. It can be a terrific connection if you trust this person to run the business, but finding the right fit is difficult.
c) Incubator/accelerator – These are often Trade Partners or distributors who want more skin in the game. They want to reap the benefits of your success in China, and they want more influence over the brand in China in the long run.
The Commercial Partner Checklist
You will almost certainly be listed on Tmall, so ensure that your commercial partner has a good rating and has been approved by Alibaba. It is also critical that they have a positive relationship with the Tmall global team in the beauty category.This will have an effect on your store traffic.
Find out what their key area of expertise is, what their industry emphasis is, and who their major clients are. Examine their team’s composition as well as their skill set. Strike a healthy balance between performance fees and account maintenance fees. While you want to incentivize them to push sales, you also want them to do what is best for the business, so a balance must be achieved. For example – if they can only make money by pushing sales, they will continuously force you to offer discounts.
What about Brand Marketing?
A distributor will not invest in efforts that do not directly result in a return on investment. Because of this, as the brand, you may need to approach brand marketing differently by onboarding a quality Chinese digital agency.
A good marketing agency should be considered for:
- Strategy, setup, and ongoing management of social media platforms. They should also be able to carry out social selling campaigns.
- High-quality online content that will appeal to your target audience. Look for a company with a Beauty-focused copywriting team. They must be engaged in and understand what the consumer wants in order to adjust your global content so that it resonates locally across all of your platforms.
- Are they just focused on e-commerce KOLs to drive sales, or do they recognise the importance of brand building KOLs? Do they have an in-house staff that works directly with these KOLs, or do they have to outsource? Can they carry out KOC product seeding programmes, which are incredibly beneficial for small businesses but necessitate a lot of hand-holding?
- SEO, SSO, and SEM. They are all critical components of your Chinese marketing plan . Check to see if your agency can carry out a simple yet effective search campaign. Key words must be utilised consistently throughout every communication, and KOLs and KOCs must likewise employ these keywords.
- Ensuring that your message is extended beyond your own social and e-commerce platforms. Chinese consumers require more touchpoints than most other nations – 8 touchpoints before purchase vs. 4 in the West on average – so make sure your brand is visible to them!
Your Brand Bible For The Chinese Beauty Market
To get the most out of your marketing budget in China, you must be focused and consistent. Furthermore, all of your stakeholders must be on the same page.
The brand bible we are referring to here is a master document that serves this purpose & includes:
-Brand Messaging hierarchy: brand promise, positioning statement
-3 key messages that make you unique
– The core target audience
While your brand promise, positioning, and value proposition don’t need to be altered, the 3 key messages you are promoting in China may differ from those at home. So, research what will resonate best with your Chinese audience. Because China has such a large population, you must target the right people and provide the right message. Choose your key words for China based on this , and use them consistently in every communication.
Managing Your Stakeholders – Inhouse
Even if you have the best trade partner in the world, you will still require someone to supervise, assist, and provide them with information. Hiring an in-house professional who can work directly with the agency on a daily basis is recommended. Focus on someone who is Chinese with a strong marketing background in Mainland China, as they are effectively your brand custodian.
Digital Crew is a Chinese digital marketing agency in Melbourne that assists beauty brands in entering the Chinese beauty market in the most effective and optimal way possible. Contact us today to get started with your launch.